Response to consultation paper on dispute resolution: draft regulations

APRIL 2004

INTRODUCTION

Law Centre (NI) is a voluntary organisation providing legal and other support services including training, publications and information to 83 full time members and 350 associate members.  Full time members consist of local CAB and independent advice agencies and other voluntary organisations who provide advice as part of their overall function.  Associate members includes solicitors, trade unions, political parties, probation and social services offices and community based organisations including tenants associations.  The Law Centre provides an advice line and casework service on referral to its members in the areas of social security, social services, immigration, housing and employment law.

Our employment work involves representation at industrial tribunals, undertaking other employment casework and advice and providing training and information on employment law.  The Law Centre is currently working on the production of a book on employment rights in Northern Ireland.

GENERAL COMMENTS 

Encouraging the resolution of employment disputes without recourse to divisive, stressful and expensive legal processes is a laudable aim, and one which Law Centre (NI) broadly supports, albeit with some reservations regarding these proposals.  Genuine and constructive dialogue to resolve problems in the work-place is welcome.

However, the underlying aim of the Regulations and of the primary legislation is to reduce the burden on the tribunal system by reducing the number of cases, thereby reducing the cost to the public purse.  This should not come at the expense of the employee, for whom the tribunal is often the only effective source of recourse.  Additional restraints or barriers to access to an independent arbiter has the effect of further circumscribing employment rights.  We are not aware of any research establishing that the burden on the system is due to unmeritorious or vexatious claims by employees which justify introducing restrictive measures.

If both employer and employee are acting in good faith, the new procedures may have a beneficial effect, but they may also be open to abuse by the unscrupulous employer.  The procedures are complex, and it is often not clear when they are complete.  Based on our experience, we believe an employee is unlikely to be aware of the intricacies of the new arrangements and therefore will be placed at a disadvantage.

As the law stands, tribunals have limited power to adjudicate as to the “fairness” of a dismissal.  If an employer follows procedure and their actions fall within a “band of reasonable responses”, the tribunal will not look any further at the actual decision made.  An employer might act in bad faith, and follow the procedures set down simply to limit  potential liability, yet this abuse of the system could escape punishment.  A substantial review of the legislation is needed to ensure that genuine fairness of treatment is promoted and substantive unfairness recognised and penalised.

SPECIFIC RESPONSES

1. Dismissal and disciplinary procedures:

While the consultation paper is careful to emphasise the continued importance of the LRA Code of Practice, Law Centre (NI) believes that the co-existence of the two schemes is likely to lead to confusion and possibly devalue the more stringent requirements of the Code.  If the Code of Practice represents ‘best practice’ which should be followed by all employers, then consideration should be given to adopting or adapting those provisions to establish the statutory minimum, rather than introducing a new and lower threshold.

In terms of the Draft Regulations Law Centre (NI) considers that the proposed standard dismissal and disciplinary procedures should apply to all actions commonly perceived as being disciplinary in nature, including oral and written warnings and suspensions.  Formal warnings are the most common disciplinary sanction and are potentially very serious, especially when their cumulative effect is considered.  A series of warnings might lead to dismissal, but the statutory procedures would not be engaged until the final stage, when the existence or validity of the earlier infractions could not be challenged, even though they would have a crucial significance in reaching that decision.

The onus should remain on the employer to follow formal procedure at all stages of the disciplinary process, rather than shifting the responsibility to the employee to invoke the grievance procedure in some circumstances.  This hybrid system is likely to lead to confusion.

A large proportion of employers in Northern Ireland are small businesses.  In these organisations there are unlikely to be multiple tiers of management, so that it may be unavoidable that the same person or panel who reached the decision to dismiss will then hear the appeal against that decision.  This renders the appeal an artificial exercise which does not satisfy the rules of natural justice.  Law Centre (NI) considers that to require employees in this position to take this step before having access to an independent tribunal is counter-productive.  Reductions or increases in the level of award depending on how the parties have followed the prescribed procedure may be necessary as an incentive measure, however, the regulations should not penalise an applicant in the circumstances outlined above.  An amendment to deal with this issue should be put into effect.

2. Modified dismissal procedure

Insofar as this procedure reflects the existing legal position, and would be applicable only in exceptional cases, Law Centre (NI) has no substantive submission to make.

3. Grievance procedures

As discussed above, Law Centre (NI) believes that issues such as formal warnings should be subject to the dismissal and disciplinary procedure rather than the grievance procedure.

In many cases, especially constructive dismissal claims based on a breach of the implied duty to preserve trust and confidence between employer and employee, the grievance procedure as outlined imposes a bar on the employee’s immediate access to justice.  Given the recognised difficulty in establishing this sort of case, imposing a further burden on the employee is a retrograde step.  If, as is often the case, the employment relationship has reached a state of mutual hostility, obliging the employee to follow these procedures may be inappropriate and impose unnecessary stress.  The problem may be particularly excaberated in small businesses (see 1 above).  If an employee (in such a business) feels that she/he has been treated so badly by an individual manager that the drastic step of resignation is the only option, the Regulations as drafted could oblige her/him to go through a grievance meeting and appeal meeting, chaired by the very individual in whom she/he has lost all trust and confidence, before she/he could bring a case to a tribunal.

Although the exemption for unreasonable behaviour (see 4 below) goes some way towards addressing this point, it is clear that there will be a substantial number of cases where the employee will not be able to avail of this exemption.  Law Centre (NI) considers that it is likely that some otherwise meritorious cases will not be proceeded with because of this procedural bar and recommends that the compulsory grievance procedure in cases of constructive dismissal should be waived.

In the alternative, Law Centre (NI) considers that if compulsory procedures are to be introduced, the modified procedure should apply if the employee so elects, which would go some way towards ameliorating the problems referred to above.

Under the draft proposals, because the modified grievance procedure could normally only be invoked by agreement, an employer could still insist on meetings, even where the employment has terminated. 

4. Exemptions

To avail of the exemption based on the unreasonable behaviour of a party, it will be necessary to prove the possibility of harm or the likelihood of harassment.  The latter is defined in terms analogous to that employed in various discrimination legislation.  As this is a potentially narrow category, and imposes an additional burden of proof, it is likely to provoke considerable legal argument.

5. Time limits

If compulsory disciplinary and grievance procedures are to be introduced, the extension of time limits proposed is a logical corollary.  Law Centre (NI) believes that the time-limit in cases involving discipline and dismissal should be automatically extended, since disciplinary procedures, especially in the public sector, can be very protracted.

6. Overlapping procedures

Law Centre (NI) considers that the interaction between disciplinary and grievance procedure will prove complex and difficult for parties, especially unrepresented applicants, to understand.  The need to comply with all the different requirements is likely to lead to employees failing to exercise their rights properly.  If the procedures were set out as part of the terms and conditions of employment (see 7 below) they would, at least, be easily accessed.  The inclusion of warnings and suspensions in the discipline and dismissal category would also give greater clarity (see 1 above).

7. Incorporation in contract

Law Centre (NI) believes that appropriate new disciplinary and grievance procedures should be implied into every contract of employment.  If these measures are not contractual, employee’s rights flowing from them will be perceived as having less force.

Implying these procedures into contract would have the added benefit of effectively ensuring that employees, through their written statement of terms and conditions, are made aware of their rights.

8. Documents

Law Centre (NI) has no substantive comment at this time.